Economics 2281 · O Level · Production possibility curve (PPC) diagrams
Production possibility curve (PPC) diagrams — practice question
In 2014, Cuban doctors received pay increases that lifted their salaries substantially. This meant that doctors’ earnings became more than twice those of nurses. Cuba is putting more resources into both medical care and tourism, which is changing the country’s production possibility curve. Living standards are rising in the country, although the increase is slower than in some other nearby countries.
(a)[2]
What does the term production possibility curve mean?
(b)[4]
Explain, with examples, two factors of production employed in the tourism industry.
(c)[6]
Analyse the reasons why doctors receive higher pay than nurses.
(d)[8]
Discuss whether living standards are invariably lower in developing countries than in developed countries.
Worked solution & mark scheme
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